What is its internal rate of return

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Reference no: EM131094587

The Walton Daily News is investigating the purchase of a new auxiliary press that has a projected life of 18 years. It is estimated that the new press will save $30,000 per year in cash operating costs.

A) If the new press costs $217,500, what is its internal rate of return? Is the press an acceptable investment if the company's required rate of return is 16%? Explain.

B) How much would the annual cash inflows (cost savings) have to be for the new press to provide the required 16% rate of return? Round your answer to the nearest whole dollar.

Reference no: EM131094587

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